GM posts first profits in more than two years
After GM and Chrysler went to the government asking for a bailout, and got one, General Motors has posted a profit for the first quarter of 2010. It is the first time the company has posted numbers in the black since 2007. GM recently repaid a portion of the auto bailout it was lent and is thought to be on the path to profitability. Ford Motor Co. also posted recent gains, so it seems auto companies are getting back on track, though they still have plenty to repay from the emergency loans they received from taxpayers.
GM posts first quarter gains
For the first time since 2007, GM has posted a first quarter profit. According to the New York Times, GM garnered about $865 million in profits for first quarter 2010. It posted revenues of $31.5 billion, and cash flow about $1 billion in the positive. It’s an overall positive sign for the beleaguered car maker, who previously had to ask the government for more than $50 billion in assistance. One year ago, the company posted losses of $6 billion.
Payment on the loans begun
Weeks ago, GM made payments on a portion of the loans from the Treasury. The actual loans to GM and to Chrysler were bundled loan packages, and they paid off one of the portions, years before it was due. While this was touted as a victory by GM and also Chief Executive Ed Whitacre, it was only a payment of $8.2 billion to the governments of America and Canada.
Not out of the woods
Despite the return of GM profits, the company is still heavily in debt. The loans it received from the U.S. and Canadian governments totaled more than $50 billion. GM has been making obvious positive strides but isn’t completely free yet. At present, the U.S. Treasury still owns more than 60 percent of GM, and those ownership stakes can only be bought by stock offering when the company goes public again. According to the same piece in the New York Times, they will potentially make a public offering by year’s end.